In New York, car dealerships can be legally liable if they present misleading or false information during a vehicle sale. This includes omitting key details or offering inaccurate claims that could sway a buyer’s decision.
It is important to note that consumer protection in these cases is governed by New York General Business Law Sections 349 and 350, which address deceptive business practices and false advertising.
These laws enable buyers to take legal action if a dealer misrepresents important facts, such as a car’s condition, features, or accident history. Affected customers may pursue compensation for their losses, legal costs, and in cases of deliberate misconduct, enhanced damages up to three times the actual loss, capped at $10,000.
Outside of the business law statutes, common law fraud laws may also hold a car dealer liable for misrepresentation. If a dealer knowingly gives false information with the intention to mislead, and the buyer relies on it and experiences financial harm, they may have grounds for a fraud claim.
New York also permits claims of negligent misrepresentation, which involve incorrect statements that are shared by car dealerships without proper verification. In other words, even if not made intentionally, a dealer may still be held responsible if a buyer reasonably trusted the information and suffered as a result.
What Are Some Common Car Dealer Lies in New York?
As mentioned above, in New York, certain deceptive practices by car dealerships may violate consumer protection statutes and give rise to legal claims. Examples of common misrepresentations and car dealer lies include:
- Odometer tampering, such as rolling back mileage to mislead buyers about vehicle usage
- False or misleading advertising, including listing features the car lacks or concealing hidden fees
- Failure to disclose material facts, such as prior accidents, salvage titles, or mechanical defects
- Bait-and-switch tactics, where consumers are drawn in by one vehicle but pressured to purchase another
- Yo-yo financing schemes, in which initial loan approval is revoked, coercing buyers into worse terms
Depending on the circumstances, these misrepresentations may constitute fraud if made knowingly and with intent to deceive. They may also be considered negligent if the representations are made without reasonable care to verify accuracy of the statements.
Consumers harmed by such conduct may pursue legal remedies under New York General Business Law Sections 349 and 350, which prohibit deceptive acts and false advertising. Relief may include recovery of actual damages, attorney’s fees, and, in cases of willful violations, treble damages up to $10,000.
Additionally, complaints against licensed dealers may also be submitted to the New York State Department of Motor Vehicles or the Office of the Attorney General, both of which investigate consumer fraud and enforce compliance with applicable laws.
What Are the Types of Auto Dealer Misrepresentation Claims in New York?
In New York, legal claims against auto dealerships for misrepresentation generally fall into three primary categories: intentional misrepresentation (i.e., fraudulent misrepresentation), negligent misrepresentation, and statutory consumer protection violations.
Intentional misrepresentation arises when a dealer knowingly provides false or misleading information to induce a buyer into a transaction. Under New York common law, a buyer may pursue a fraud claim by demonstrating that the dealer made a false statement about a material fact, knew it was false, intended the buyer to rely on it, and that the buyer suffered damages as a result of that reliance.
Negligent misrepresentation, by contrast, does not require proof of intent to deceive. Instead, it applies when a dealer provides inaccurate information without exercising reasonable care to verify its truthfulness.
In order to succeed in a negligent misrepresentation claim, the buyer must show that the dealer had a duty to provide accurate information, failed to meet that duty, and that the buyer reasonably relied on the misinformation to their detriment. In New York, such claims often require a special relationship or fiduciary-like duty between the parties.
The third category involves violations of New York General Business Law Sections 349 and 350, which prohibit deceptive business practices and false advertising. These statutes apply broadly to consumer transactions, including vehicle sales. Buyers may seek actual damages, attorney’s fees, and in cases of willful or knowing violations, treble damages up to $10,000.
Additionally, if a contract was formed based on a misrepresentation, the buyer may be entitled to contract rescission and may pursue contract damages stemming from the fraudulent inducement.
Should you have any questions regarding car dealer misrepresentation claims, it is recommended to set up a legal consultation in New York with New York lawyers who have experience in consumer and contract law. They can answer your questions and provide valuable insight.
What Is Fraudulent Misrepresentation Under New York Law?
As noted above, fraudulent misrepresentation in New York involves a knowingly false statement made with the intent to deceive another party, leading that party to rely on the statement and suffer harm as a result.
This legal concept is recognized under New York common law, and may also intersect with statutory provisions such as New York General Business Law Sections 349 and 350, which address deceptive practices and false advertising.
In order to prevail in a fraudulent misrepresentation claim under New York law, the plaintiff must establish:
- A false representation concerning a material fact
- Knowledge by the defendant that the statement was false, or reckless disregard for its truth
- Intent by the defendant to induce reliance on the statement
- Justifiable reliance by the plaintiff
- Resulting damages that are actual and quantifiable
New York courts also recognize that fraud may arise from silence or partial disclosure, particularly when there is a duty to speak. Such a duty may exist in fiduciary relationships or when a party makes a partial or ambiguous statement that creates a misleading impression.
How To Sue a Car Dealer for Fraudulent or Negligent Misrepresentation in New York
If you believe that a car dealer in New York misled you, whether through deliberate deception or negligent misstatements, then you may have legal avenues to seek compensation. Whether the misrepresentation involved the vehicle’s condition, financing terms, or its history, New York law provides remedies through both the courts and regulatory bodies.
The following is a general overview of the steps involved in taking legal action against a car dealer:
- First, gather all relevant documentation, including contracts, advertisements, written or verbal communications, vehicle history reports, and service records
- Next, attempt to resolve the issue directly with the dealership to potentially avoid litigation
- If the dispute remains unresolved, you may file complaints with agencies such as the New York State Department of
- Motor Vehicles, the Office of the Attorney General, the Federal Trade Commission (“FTC”), or the Better Business Bureau (“BBB”)
- If administrative remedies are unsuccessful, it is recommended to consult with a qualified attorney, preferably one experienced in consumer protection or auto fraud
- You may then initiate a lawsuit in the appropriate venue, such as small claims court for lower value disputes or civil court for more substantial claims
- The legal process will likely include discovery and preparation for possible settlement negotiations or mediation
- If no resolution is reached, the case may proceed to trial, where you will present evidence in order to prove liability and damages
What Is Negligent Misrepresentation Under New York Law?
As mentioned above, negligent misrepresentation in New York refers to a situation where a party conveys inaccurate information during a business or financial transaction without exercising reasonable care to verify its truth, and another party relies on that information to their detriment.
Unlike fraud, this claim does not require proof of intent to mislead. Instead, it focuses on whether the defendant failed to use appropriate diligence in communicating the facts. In order to succeed on a negligent misrepresentation claim under New York law, the plaintiff must establish:
- That the defendant made a representation in the context of a business or financial transaction
- The information provided was false and intended to guide the plaintiff’s decision
- The defendant failed to exercise reasonable care or competence in verifying or communicating the information
- The plaintiff reasonably relied on the representation
- The plaintiff suffered financial harm as a direct result
It’s important to note that New York courts generally require the existence of a special or fiduciary-like relationship between the parties to impose a duty to provide accurate information. This relationship may arise when one party possesses specialized knowledge or is in a position of trust that justifies reliance.
Should I Consult a New York Auto Fraud Attorney?
If you have been harmed as a result of car dealer misrepresentation, then it is recommended to promptly consult with an experienced New York auto fraud lawyer. LegalMatch can assist you in finding a qualified lawyer who can help assess your situation and also help you determine your most effective legal strategy.
Having legal representation significantly improves your chances of achieving a favorable outcome. An attorney will be able to explain your rights under New York General Business Law Sections 349 and 350, as well as applicable common law principles, and guide you through each step of the process.
If informal resolution efforts or administrative complaints do not resolve your claims, your attorney may initiate a civil lawsuit on your behalf. They can also assist in collecting the necessary documentation and evidence to support your case, including proof of misrepresentation and financial harm. Finally, they can also represent you at any court proceedings, as needed.
